State blocking use of EBT cards at liquor store, casino and strip club ATMs under 2-year-old law

AUGUSTA, Maine — The Department of Health and Human Services has begun blocking the use of EBT cards at ATMs in or near certain establishments under the provisions of a two-year-old law that makes the transactions illegal.

The LePage administration said Monday that DHHS has already blocked EBT card use at 44 ATMs in Maine and anticipates that more than 200 locations will be blocked by August. An EBT card, which operates similarly to a debit card, is how the state distributes cash benefits such as food support and Temporary Assistance for Needy Families.

Democrats criticized the initiative because it is being rolled out almost two years after a law making the ATM transactions illegal went into effect.

“They should have made it very clear to us that they hadn’t even started blocking the transactions,” said Rep. Drew Gattine, D-Westbrook, a member of the Legislature’s Health and Human Services Committee. “This makes it clear to me that they are interested in talking about it more than they are doing it.”

The bill in question was proposed by LePage in 2012 and sponsored by then-Republican Sen. Earle McCormick of West Gardiner. It passed unanimously through the House and Senate. Among other things, it outlawed the use of EBT cards at liquor stores, gambling facilities and adult entertainment businesses where at least 50 percent of those facilities’ gross revenues derive from those activities.

Anyone who uses an EBT card at a prohibited location could be excluded from the program for a year on the first offense, for two years on the second offense and permanently if there is a third violation.

LePage spokeswoman Adrienne Bennett said Monday that the law outlawed EBT usage at the locations but did not call for a block to be enacted on nearby ATMs.

“The law didn’t require this activity on our part; it is an extra step to make sure this doesn’t happen, and protect the card member from using it in the first place,” said Bennett.

A press release from LePage listed six of the 44 businesses with ATMs that have already been blocked from accepting EBT cards. Those identified businesses include PT’s Showclub in Portland; Diamond’s Gentlemen’s Club in Bangor; Styxx in Portland; Bayside Liquors in Bar Harbor; Foreplay Sports Pub in Portland and Joka’s Discount Beverage in Waterville.

Officials from two of those businesses told the BDN Monday afternoon that they hadn’t heard about the initiative until they began hearing from reporters on Monday. A clerk at Bayside Liquors said the business already doesn’t accept EBT cards at the register but so far hasn’t heard anything from customers about the ATM.

Joe Karter, owner of Joka’s Discount Beverage in Waterville, said he’s not concerned about the change and that so far, none of his customers have said anything about it.

“We don’t know anything about it and our customers haven’t complained,” he said.

Upon request from the Bangor Daily News, DHHS also provided a list that includes all 44 locations that have been affected so far.

“This is not about politics. It’s about making sure that each public dollar spent on welfare is used appropriately,” said LePage in a press release. “These tax dollars are designated for daily necessities like diapers and health meals that vulnerable families and children need to survive. To think these dollars may have been spent on liquor and adult entertainment is incomprehensible and this administration will not tolerate it.”

DHHS has a contract with Xerox to put the blocks on the ATM machines and pays a one-time cost of roughly $92 for each machine location that is blocked, according to a press release.

LePage attempted a variety of other ways to restrict the usage of public benefits — specifically EBT cards — but many of those measures were blocked this year in the Legislature. One of them, LD 1822, would have banned cash welfare benefits from being used on tobacco, alcohol, lottery, gambling or bail. Another bill, sponsored by Gattine, would have required DHHS to make annual reports to the Legislature about its efforts to increase the integrity of a variety of social services programs, including the amount of fraudulent activity that resulted in prosecutions, the amount of money recovered and the cost of recovering that money.

LePage vetoed that bill, LD 1829, which had been supported in both legislative chambers along mostly party lines. Gattine theorized that part of LePage’s opposition to LD 1829 was that the LePage administration feared it might show that either the problem of fraud isn’t widespread or that prosecuting it costs more than it’s worth.

“They don’t really want to shine a light on the fraud problem; they just want to continue hammering away on the political issue,” said Gattine. “If they’re transparent it might become clear that they’re not doing enough with the power that they already have.”

DHHS spokesman John Martins said Monday that EBT card holders have been notified via mail of the new restrictions and Bennett said the state is moving toward including language about the restriction on the backs of EBT cards, which has already been done in a voluntary pilot program in the Bangor area that also puts card holders’ photographs on their cards.

“Misuse of this EBT card is unlawful,” reads the warning, according to a photograph of it provided by Bennett. “This card cannot be used for purchases or cash withdrawals at any establishment with gambling, more than 50% gross revenues from liquor, or an adult oriented entertainment location.”